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Classifying costs:
The following is a list of costs that were incurred in the production and sale of large commercial airplanes:
a. Salary of chief compliance officer of companyb. Power used by painting equipmentc. Instrument panel installed in the airplane cockpitd. Annual bonus paid to the chief operating officer of the companye. Turbo-charged airplane enginef. Interior trim material used throughout the airplane cabing. Cost of normal scrap from production of airplane bodyh. Hourly wages of employees that assemble the airplanei. Salary of the marketing department personnelj. Cost of paving the headquarters employee parking lotk. Cost of electrical wiring throughout the airplanel. Cost of electronic guidance system installed in the airplane cockpitm. Salary of plant managern. Cost of miniature replicas of the airplane used to promote and market the airplaneo. Human resources department costs for the yearp. Metal used for producing the airplane bodyq. Annual fee to a celebrity to promote the aircraftr. Hydraulic pumps used in the airplane's flight control systems. Yearly cost of the maintenance contract for robotic equipment t. Prebuilt leather seats installed in the first-class cabinu. Depreciation on factory equipmentv. Special advertising campaign in Aviation Worldmagazinew. Oil to lubricate factory equipmentx.Masks for use by painters in painting the airplane bodyy.Decals for cockpit door, the cost of which is immaterial to the cost of the final productz.Salary of chief financial officer
Instructions:
Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for your answer, placing an "x" in the appropriate column
20112010nbspnbspsales511000413000nbspnbspcost of goods sold330000268000nbspnbspgross
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